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Shri Kamal Nath, Union Minister of Commerce & Industry, has called for an equitable tariff reduction formula in the negotiations on non-agricultural market access (NAMA) in the World Trade Organisation (WTO), keeping in view the concerns and interests of developing countries, including India. Shri Kamal Nath was participating in the two-day Meeting of leading WTO Trade Ministers –mini-Ministerial in Kenya last evening, at which the subjects discussed were NAMA and Services. Agriculture and developmental issues are scheduled to be taken up for discussion today.
According to reports from Kenya, the discussions on NAMA were constructive and useful. For the first time, actual tariff reduction formulae in NAMA were discussed at the Ministerial level. The European Union (EU) put forward their proposal for the Swiss type formula*, with credits to be given to developing countries. But India responded by saying that this was not adequate. The United States (US) reiterated its suggestions for using two different co-efficients for tariff reduction – one for developing countries and one for the developed countries. Shri Kamal Nath remarked that while this suggestion was a step in the right direction, it was still not adequate. The formulae still required a lot of fine-tuning, he said, and suggested that the Girard formula** which used co-efficients for each
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* Swiss formula: involves reduction of high tariffs by very high percentages, thereby affecting developing countries.
** Girard formula: takes into account the existing tariff structures of member countries, in line with the concerns of developing countries.
country equal to its own tariff average as this could be the most appropriate mechanism. However, Shri Kamal Nath said that even the Girard formula had its shortcomings and hence, India, Brazil and China along with some other countries were working on a modified Girard formula, so as to evolve a suitable formula for tariff reduction in the area of non-agricultural market access. “We are giving final touches to this and hope to be able to table it shortly”, he said. This statement by India was welcomed by the participants, who felt that this could be the basis for a breakthrough in the NAMA negotiations.
Shri Kamal Nath also strongly raised the issue of non-tariff barriers (NTBs) in the non-agricultural sector, pointing out that persistence of NTBs would negate whatever flexibilities were available for developing countries in non-agricultural market access.
In Services, the Minister made a strong pitch for liberalisation of movement of natural persons under Mode 4. “All these (requirements of) qualifications, visas and licensing are being done in a non-transparent manner and acting as Technical Barriers to Trade (TBTs) in Services, just as sanitary and phyto-sanitary (SPS) measures often act as TBTs to trade in goods”, Shri Kamal Nath said.
“We are now calling on all membership involvement in trying to make preparations as best we can so that Hong Kong can put us on the road to successful completion”, WTO Director-General Supachai Panitchpakdi said at the start of the talks in Kenya.
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